Workers paying the price as crude collapse continues

1of 5Some 72,000 oil workers lost their jobs last year, according to the Texas Alliance of Energy Producers’ economist. Another 40,000 industry workers in Texas face possible layoffs this year.Photo: Express-News file photo

2of 5An oil field worker posiitons himself in the derrick position on an oil rig in Hallettsville, Texas on May 22, 2015. The drill collars stand next to him. Oil companies expect to spend billions more next year on drilling wells and pumping oil across the United States, a financial boost for firms that sell tools and equipment, farm out crews for rigs and fracking fleets and employ thousands across Texas.Photo: Carolyn Van Houten /San Antonio Express-News

3of 5A loss of 7,500 jobs in the sector that includes the oil and gas industry in March weighed on Texas’ total employment, which posted a net job loss for the first time in nearly a year, according to the Texas Workforce Commission.Photo: Express-News file photo

4of 5Companies in the oil and gas industry have come under greater scrutiny from the Department of Labor over wages in the last few years. In its 2015 fiscal year, the agency’s Southwest region, which encompasses Texas and 10 other states, collected $22.3 million in wages on behalf of 4,700 workers.Photo: Express-News file photo

5of 5Shale drillers have shown remarkable “tenacity” in holding up output in the face of falling prices, EIA administrator Adam Sieminski said. Crude at $50 to $60 a barrel would probably spur an increase in their production, he said.Photo: San Antonio Express-News /File photo

The crash in crude oil prices continues to hit hard in the Texas oil field, where layoff announcements keep coming — and tight finances are fueling disputes between workers and employers.

Three oil and gas service companies recently told the Texas Workforce Commission about layoffs in San Antonio and Robstown — both cities outside of the Eagle Ford Shale field that have served as a base for oil field staging and services.

CalFrac Well Services in San Antonio recently told the Texas Workforce Commission it would lay off 87 workers by May 1.

Ashley Connolly, manager of capital markets for Calfrac Well Services Ltd., said by email that the company has suspended operations in its San Antonio office for now because of “market conditions for oil and gas services. … Several staff members remain at the District location to manage the facility and our assets but the office is effectively closed for the time being,” Connolly said.

Cudd Energy Services, based in The Woodlands, laid off 60 workers at its Tacco Drive facility in San Antonio on March 11, although those workers will be paid and receive health insurance through May 10, according to a letter filed with the Texas Workforce Commission.

C&J Energy Services will lay off about 87 employees at its facility in Robstown by May 6. “The planned layoffs are being classified as permanent, although the Company hopes to rebuild its work crews whenever orders for services warrant additional staffing,” the C&J letter reads.

View some of the WARN documents related to layoffs:

The Worker Adjustment and Retraining Notification Act requires companies in many instances to provide notice 60 days in advance of plant closures or mass layoffs.

Tumbling oil prices, down from $107 per barrel in June 2014 to around $40 Thursday, have cut into company revenues. In turn, firms have moved into survival mode, slashing expenses and workers.

The research firm Wood Mackenzie has tracked $91 billion in cuts from 121 companies. At least four dozen energy companies have gone bankrupt so far, according to Haynes & Boone LLP.

Some 72,000 oil workers lost their jobs last year, according to the Texas Alliance of Energy Producers’ economist. Another 40,000 industry workers in Texas face possible layoffs this year.

C&J Energy Services announced other big layoffs in the region earlier this year. In February, the company said it would lay off 78 workers at its Pleasanton facility in Atascosa County by April 4.

Also in February, Pioneer Natural Resources also announced it would lay off 148 workers at its Victoria location. Irving-based Pioneer recently said it would stop drilling in South Texas altogether, which isn’t as profitable for it as the Permian Basin, where it’s one of the largest acreage holders.

As finances get tighter, it’s fueling tension between oil field workers and employers, who are increasingly at odds over wages.

The U.S. Department of Labor on Thursday announced the latest settlement with an oil field company about unpaid overtime, this dispute involving workers in Texas and New Mexico.

Nova Mud Inc., Nova Hardbanding LLC and Nova Sand LLC have paid $1.5 million to 241 oil well service workers — $750,000 in back wages and another $750,000 in damages, under the agreement. The Department of Labor’s Wage and Hour Division said the businesses, which are commonly owned, violated the Fair Labor Standards Act’s by paying fixed semimonthly salaries without regard to the number of hours employees worked.

“In this case, employees routinely worked well in excess of 40 hours per workweek, without being paid overtime,” the agency said in a news release.

The Department of Labor also filed a lawsuit in December against Platform Marine Inc., a pipe fabrication and rig repair company in Victoria, after it said an investigation found the company violated the Fair Labor Standards Act by not paying 43 employees around $45,600 in overtime wages.

Platform Marine’s attorney, Greg Godkin of Austin’s Roberts Markel Weinberg Butler Hailey, said the company has filed an answer in federal court and does not think the agency’s claims are correct, or that its investigation revealed the correct facts.

“We absolutely dispute the Department of Labor’s claims against us,” Godkin said. “Platform Marine has been around a long time, and they’ve been really good to their employees.”

Companies in the oil and gas industry have come under greater scrutiny from the Department of Labor over wages in the last few years. In its 2015 fiscal year, ended Sept. 30, the agency’s Southwest region, which encompasses Texas and 10 other states, collected $22.3 million in wages on behalf of 4,700 workers. About $1 million of that amount was in the San Antonio area, on behalf of 590 workers.

Employment attorney Mark Shank of Gruber Elrod Johansen Hail Shank in Dallas said most wage disputes get filed by attorneys on behalf of groups of clients, not by the Department of Labor. These actions are being brought under the Fair Labor Standards Act, a Great Depression-era law that established a minimum hourly wage and overtime pay in certain jobs.

“In general, when any particular industry hits hard times, it’s more likely you will see lawsuits,” Shank said. “There seems to be a very large spike in oil field cases.”

Androvett Legal Media has tracked the upswing in lawsuits, from 459 such cases in 2010 to 814 last year in the Western District and Southern District of Texas, which includes Houston and the state’s two major oil fields, the Permian Basin and the Eagle Ford Shale.

Wage complaints about oil field firms vary, but Shank said common ones have to do with overtime and per diem, a rate commonly paid in the oil field to cover food and lodging. Some firms pay high wages but don’t pay overtime. Others may try to avoid overtime payments through paying per diem instead, Shank said.

Jennifer Hiller covers the Eagle Ford Shale, the massive oil and gas field in South Texas. She previously covered real estate, development and architecture for the Express-News. Jennifer has worked at several newspapers across Texas, as well as at the Honolulu Advertiser and Arkansas Democrat-Gazette. She's a Houston native and a graduate of the University of Texas at Austin, where she received a degree in journalism.